Deemed exports refer to those transactions in which the goods supplied do not leave the country and the payment for such supplies is received either in Indian rupees or in free foreign exchange, as permitted under the applicable provisions of India’s Foreign Trade Policy. Thus, unlike normal physical exports, deemed exports involve the supply of goods within the domestic territory of India, but such supplies are treated as exports for certain policy benefits. The concept is important because it encourages domestic manufacturers and suppliers to participate in projects that have an export-oriented or strategic character and helps reduce the need for imports for major projects. The basic feature of deemed exports is that the goods remain within India. In a normal export transaction, goods cross the customs frontier and are supplied to a buyer located in another country. In a deemed export transaction, the buyer or project may be located in India, but the transaction satisfies specified conditions under the Foreign Trade Policy. Therefore, deemed exports are different from physical exports, although they may receive certain export-related benefits. The classification is based not simply on the nature of the buyer but on the specific categories of transactions notified under the Foreign Trade Policy. Deemed exports have traditionally covered specified supplies to certain projects and entities. These include supplies against Advance Authorisation, supplies to Export Oriented Units (EOUs), supplies of capital goods to certain projects, and supplies to projects financed by specified international agencies or multilateral institutions, subject to the conditions prescribed under the prevailing Foreign Trade Policy and related procedures. Supplies to certain infrastructure and power projects may also qualify where specifically provided by the policy. Since the exact categories and benefits can change with amendments to the Foreign Trade Policy and its procedures, exporters and suppliers must verify the applicable provisions at the time of undertaking the transaction. One important category is supplies made against Advance Authorisation. An Advance Authorisation permits duty-free import of inputs required for the manufacture of export products, subject to prescribed conditions. In specified circumstances, an Indian supplier can make supplies to an eligible holder of Advance Authorisation and obtain deemed export benefits. Such arrangements encourage domestic sourcing of inputs and enable